On a monthly basis, prices on consumer goods and services increased 0.1% in May. Core PCE inflation, which strips out volatile food and energy prices, came in at 2.

While the consumer price index is more commonly known, the Fed relies heavily on the PCE for deciding its stance on monetary policy. At the moment, the Fed is keeping interest rates high – and borrowing costs for consumers elevated – as it wants to see more data on how President Donald Trump’s import tariffs are affecting inflation.

Federal Reserve Bank of Richmond President Thomas Barkin said on Thursday tariffs are very likely to push inflation up over coming months, in remarks that said U.S. central bank policy is where it needs to be to deal with what lies ahead.